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     December 1996 January 1997 Past Issue

Riding the OSB boom

Hedging against a downturn, Weyerhaeuser invests $16 million to improve recovery at its OSB plant at Slave Lake, Alberta.

By Tony Kryzanowski
Copyright 1996. Contact publisher for permission to use.

Weyerhaeuser Canada is confident a $16 million investment to improve recovery and become more automated at its Slave Lake oriented strand board (OSB) plant will secure its survival through what many predict as lean years in the OSB market due to over-capacity.

When OSB prices were high in the early 1990s, it seemed everyone was jumping into the market all at once, resulting in 25 new OSB plants coming on line in North America in seven years.

OSB is replacing plywood as the construction material of choice, particularly in the large US market, but not enough to absorb that volume of production.

In Alberta alone, Weyerhaeuser has had to contend with two larger competing OSB plants within a short distance from Slave Lake: one built by Ainsworth in Grande Prairie and one built by Tolko in High Prairie. Slave Lake produces about 210 million feet annually based on 3/8'' width. That is less than half the production of newer competing mills rated at between 500 and 550 million feet annually.

OSB Plus, the plant has already been mothballed once by former owners, Weldwood, who, after investing nearly $20 million in the mid-1980s, shut the plant down in 1990. After being shut down for nearly three years, Weyerhaeuser purchased the plant from Weldwood in 1992 because of a robust OSB market at the time. Weyerhaeuser gained about a two-year head start on their nearest competitors as a result of this purchase.

Initially, Weyerhaeuser spent $4 million and 14 months just getting the plant operational.

"With market conditions being very strong, we spent the money to get the mill back up with a quality product, just the way it was," says Weyerhaeuser Slave Lake general manager Stan Nicholls. "Taking a look into the future, we could see that with all the new capacity of OSB coming on line, we needed to invest some capital to help reduce variable costs and to get us into a more competitive position to face the market downturn."

"We take advantage of our marketing strength that way," says Nicholls. Given the incredible competition within the commodity OSB market, Nicholls says Weyerhaeuser has a plan to move in other directions. "We are looking at doing some different value-added products," he says, thus avoiding the standard commodity market. But those changes are still down the road. The immediate concern was improving efficiency at Slave Lake in a way that would not force the owners to shut the plant down again. A total of 147 employees were counting on them. "

I believe to keep it viable in what I see as a very slow market for the next few years, this money was critical for the long-term success of the plant," says Nicholls. "My own personal view is that without this capital, I really doubt that we would have been able to make it through the downturn. I feel very confident that with the people we have and with the capital money we have, we will make it."

Weyerhaeuser is spending to improve its green end and slasher process. The result will mean more automation, better recovery and about a 15 per-cent work force reduction.

The company began trimming its work force last March, replacing vacant positions with temporary employees. By the time plant improvements kick in, there will be 20 fewer employees.

The plant consumes about 308,000 m3 of wood annually, consisting of approximately 70 per cent white aspen and 26 per cent black poplar. It is harvested by two private contractors from Weyerhaeuser�s Forest Management Area (FMA).

Tree-length wood arrives at the Slave Lake plant and two or three portable slashers operate 24 hours a day, seven days a week, to buck it into 8' lengths before it enters the ponds. After soaking, the wood is cut into 22'' lengths, and then passes through four different types of CAE waferizers to make furnish to produce OSB.

This system is part of the plant�s original equipment, and has several drawbacks. Firstly, portable slashers require a high degree of manual labour. Secondly, the wood is not 100 per cent utilized. Nicholls says they currently have 2' and 3' pieces that end up as pulp chips.

OSB "We felt in order to be competitive, we needed to have all our fibre being utilized in our process to get our recovery numbers as close to 100 per cent as we possibly could," says Nicholls.

Pulkkinen has spent considerable time touring other sawmills and addressing AGAWA's main priority, that is developing a log profile from an extensive inventory conducted on their Crown leases. They want to ensure that changes they make to the mill will reflect their log supply. Among their findings so far is that they can expect considerably more pulpwood and hardwood. They will harvest many more smaller and larger logs than what historically were prime quality pine sawlogs.

They have decided to purchase a permanent, multi-saw slasher system manufactured by Quebec City manufacturer Huot. "We travelled some miles and spent some time in Quebec looking at different slashing systems," says Nicholls. "Huot makes a very good slashing system, so we are looking forward to see how that works out."

Because it will only run five days a week, 16 hours a day, Weyerhaeuser will realize an immediate cost benefit. They have also purchased a 27'' Nicholson ring debarker. Now blocks and end pieces will go through the ring debarker and enter the stranding process instead of ending up as wood chips.

The new multi-saw slasher will be operational by December 15, 1996, and the new strander will begin production in mid-March. About 85 per cent of Weyerhaeuser Slave Lake�s annual production is flooring material destined for the American midwest, specifically the Utah area. But they are diversifying. Recently, they shipped some product to Russia and are making some specialty products for a growing Japanese market.

This project is really just the beginning of changes contemplated for Weyerhaeuser�s Slave Lake operation. Nicholls says this capital project is being implemented to survive the downturn. Eventually, the company may convert the plant to a 12' line if their wood supply can sustain it. Any production expansion will have to come from their own forest resource, since Crown land surrounding their FMA is held by other companies. Nicholls says they are committed to a sustainable forest, so they must be careful not to over-produce beyond their sustainable annual allowable cut. Weyerhaeuser is conducting a detailed inventory of their wood supply to see if they can manufacture OSB from different wood species and if moving toward a 12' line is viable.

The plant started out manufacturing waferboard 21 years ago, and was owned by a group of investors called the Alberta Aspen Board Association. Weldwood purchased the plant in 1977, converted it to an OSB mill in the mid-1980s then mothballed it before Weyerhaeuser arrived on the scene.

Waferboard pre-dated OSB as construction material, and is manufactured by placing strands in a random orientation. On the other hand, OSB strands are oriented perpendicularly to each other for added strength. It has found many other specialty uses beyond the traditional waferboard applications of wall sheeting and roofing because of its strength; one is as a component in floor joists.

Weyerhaeuser Slave Lake operates its process this way: Once wood entering the plant is waferized, it enters two 12' X 52' triple-pass MEC drum dryers. It then enters a rotary screen process to screen out fines, and is stored in dry bins. The material proceeds to what Nicholls describes as an "old vintage" Schenck forming line, featuring Durand equipment. The press is a 4X16, 24-opening Washington Ironworks press. The trim line is a combination of Globe, Burelbach and Durand equipment.

About 70 per cent of production is shipped by rail. The rest is trucked out. Nicholls says their Slave Lake OSB plant is very important to the town of Slave Lake and the surrounding area. In addition to providing direct employment for 147 workers, they do a lot of business in the area and create many spinoff jobs.

Weyerhaeuser's plan for surviving in the short term, remaining employees can be reasonably assured their jobs are safe for the foreseeable future.

December 1996 / January 1997 Table of Contents

Evans cited as first code victim
Soaring stumpage fees and Forest Code-inflated logging costs forced Evans Forest Products to its knees. Other mills could be facing the same fate.

Timber Sales Fund Innovative Harvesting Training Program
Eighteen people are learning new harvesting techniques.

Riding the OSB boom
Hedging against a downturn, Weyerhaeuser invests $16 million to improve recovery at its OSB plant at Slave Lake, Alberta.

Cost conscious cut-to-length
Setting up a new CTL show in remote northern Manitoba, Art Riemer wanted dependable equipment - but not at a price that would turn his accountant surly.

Sticking in a Tough Market
At Fort Nelson, the world's largest chopstick plant produces eight million units a day for demanding Japanese buyers.

CCMC Furthering Aspen as a Commercial Species in BC
CCMC is a pioneering company making exclusive use of high-quality aspen.

Tech Update: Cable Yarding Systems
A review of the different cable yarding systems that are available on the marketplace

Helicopter Logging Capability Guide
Heli-logging remains a practical harvesting alternative in many of British Columbia's mountainous regions.

The Eagle Flies
At the site of an abandoned chip mill in Miramichi, Eagle Forest Products turns the key on a new $100 million OSB plant.

New Centre Targets Value-Aded Training
With an estimated 30,000 skilled workers needed in the value-added sector in BC by 2001, the industry has moved to address a potentially serious training shortfall.

Haliburton: A Multi-Use Model
Ontario's Haliburton Forest, a popular recreation site, also hosts extensive forestry research and education programs - and a unique 'one stem at a time' selective logging program.

Northern Mills Address Need for Added Kiln Proficiency
The added market value of kiln-dried lumber is driving a push for new technology and added training for operators.

Supplier Newsline
Trade magazine ads pay off.

Calendar of events
A rather substantial listing of forestry shows and conferences happening throughout the world.

Return to the December 1996 January 1997 Table of Contents

Last modified 12/18/96

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